Could Apple’s iAd Compete with Google in Mobile Ad Market?

Apple always strives to unveil "the next big thing." Think iPod and iPhone. According to Steve Jobs, the most recent "big thing" is Apple’s new ad platform, speculatively called iAd. In true Apple fashion, details are vague, but we do know it will be unveiled April 7 — four days after fan boys get their paws on the iPad. It’s rumored Apple will use location and other touch-points to serve personalized ads with unprecedented precision on the iPhone, iPod and iPad. Apple’s mobile ad network is the spark that will ignite the mobile ad competition with Google. We are on the cusp of a mobile ad revolution in which Google and Apple will battle for an estimated $3.3 billion dollar market by 2013.
Google’s growth in smartphone ad requests and OS traffic share position the search giant to overtake Apple in the fertile mobile ad market. Apple can compete with a rich, app-based user experience while Google can leverage its robust technology and industry know-how. At the end of the day, it’s about which competitive advantages are more important to advertisers and consumers.
"It’s the Google threat that’s prompted Apple to get a footprint in this market of course, along with the promise that it’ll be a multi-billion dollar game in a very short while," writes Fast Company. Google and Apple recently acquired mobile ad firms AdMob (for $750 million) and Quattro Wireless (for $300 million), respectively. What are the competitive advantages of Apple and Google?
Advantages of Apple
Rich App Ecosystem — Apple’s rich, app-based platform can deliver "an uber-precise, user-targeting ad placement system with an associated analytics package that Apple may wind into the iPhone’s code so developers can access it through apps," writes Fast Company. This initiative would incentivize app developers to incorporate iAd into apps.
Enhanced User Experience — Google’s Droid OS is distributed across multiple smartphone devices, but lacks the Apple iPad’s clean, visually stunning ad capabilities — particularly for magazines. Apple could leverage location-based technology to refine advertisements on Reuters or the Washington Post.
Location Based Tech — While Quattro’s tech can serve ads based on gender, age, household income, location, time, ethnicity and education, Apple has a standing policy against location-based advertising in its App Store. To compete with Google in the race for hyper-relevant ad delivery, Apple will have to do a 180 on their location – based policy.
Advantages of Google
Industry Know-How — Google, the king of digital ads, has the industry know-how and technology to build a rich advertising ecosystem. Google’s AdWords raked in $21 billion in 2008. In fact, ads are Google’s cash cow and it’s not a stretch for Google to leverage its ad savvy team to develop, in conjunction with AdMob’s tech, a robust mobile ad platform.
Location-Based Search – "Google—still in the process of acquiring mobile ad firm AdMob—has patents related to location-based ad serving, writes Ars Technica. However, Google already...